Is the startup community relying too much on fate? Connecting the outliers.

by mikepk on May 5, 2010

We’re experiencing a new kind of innovation in startups, a revolution that’s already underway. The perfect storm of open source, low capital requirements, and democratized distribution is enabling a new class of entrepreneur, one that doesn’t have to ask permission to make things happen. That entrepreneur is, however, running into a new kind of problem: they can’t do it alone.

There is a constant that all truly great companies seem to share: they were not the product of a single individual. There’s a lot of talk regarding the “proper” number of startup founders, and while there’s no consensus, the number is never “one”.

Startup people are weird folk. I don’t mean that in a disparaging way, it’s just that the people who have the fire and the passion to create, to endure real uncertainty for the chance at changing the world, these people are statistical outliers. Compounding this fact, many successful startups are founded by people with pre-existing personal relationships. Not only do you need to have one odd misfit but at least two, in proximity, and preferably with an existing relationship. If startup founders are one in a hundred, then by pure random chance the probability of finding a pair of them will be one in 10,000. [1]

Ask most experienced entrepreneurs for startup advice and you will invariably be told that one of the most critical, if not the most critical factor affecting the eventual trajectory of a startup is the initial team, the first co-founders. As a community we’ve left this crucial component of the early success of startups to fate. We’re dependent on serendipity, that two statistical outliers happen to room together in college, work together at the same company, or be part of the same circle of friends.

I spent many years trying to convince friends and co-workers to take the startup leap with me. I thought it was a failure on my part to sell an idea, share the sheer joy in the process of creating something wholly new, or really explain the appeal of being master of your own destiny. What I came to realize is that there is something that sets startup entrepreneurs apart and it’s not a quality that’s easily imparted. It doesn’t make startup entrepreneurs any better or worse, OK maybe a little bit crazier, but it’s a drive that is not present in everyone.

Ultimately, I was unable to convince my circle of friends and co-workers and ended up starting out on my own. To say this was a difficult journey is an understatement. My first startup experience was radically altered when I met the individual who was to eventually become the co-founder of my first company.

Initially, this veteran of the startup process acted primarily as a mentor. This initial help led to many positive developments in my startup. The idea that I had been deeply focused on, that I was convinced was “the next big thing”, was completely altered by coming into contact with his vision. Together our varied experiences molded a completely new idea. Over several months, he continued to act as a mentor and sounding board, aiding me on the startup process and the core of the company. After months of working together informally, he joined me as a co-founder, transforming what had been my startup into our startup. [2]

The key, I believe, is that we built a relationship before we became co-founders. We forged a sense of trust. I trusted his vision and experience and he trusted my ability to deliver technology. We realized we could work together, and that our combined energies summed to a whole greater than our individual parts. More importantly, we were both able to determine that the other had the spark, a commitment to the company, evolving the idea, and creating something wholly new.

I see a gap in the current startup ecosystem. In Boston, we have lots of networking events for entrepreneurs, ways to socialize with others that share our startup enthusiasm. Even though this leads to some connections, there’s no clear mechanism for building the deeper trust-based co-founding relationships that are necessary. We’re still relying on fate.

As a community, we’re starting to become aware of the problem and there are many solutions being tested. Co-working spaces, founder match programs, and networking events specifically focused on co-founders, are all steps in the right direction. I think we need to go further though, hacking the startup process to build more potentially viable startup founding teams.

TechStars, YCombinator, BetaSpring and other seed accelerators are a tremendous resource but they still require, as their raw material, teams of “outliers”. They provide great resources and direction for those startup individuals who have already found each other. The more startup entrepreneurs we can bring together to form viable teams, the more seed accelerators can flourish, and the more startups we’ll have in Boston.

We need a way to build trust and working relationships between the outliers that have the spark, the ones that didn’t happen to room together in college. If we can accomplish this, we will be increasing the pool of potentially successful startups in the community. We have an opportunity to cultivate the raw materials of a new class of startup, a new population of those with the drive to make things happen, connected together in a network unlike anything seen before.

Notes

  • [1] Obviously these populations tend to self filter and cluster. Engineering schools, entrepreneurial clubs, technology companies, etc… so it’s not purely random. There’s still a large element of chance in the initial formation of teams though.
  • [2] My first startup evolved to become Grazr.com. After building some strong core technology and launching several products focused on feeds and social media monitoring, Grazr corp. wasn’t able to find success with those products and ceased operations on Sept 30 of 2010. I left my position as CTO of Grazr in June of 2009.


Thanks to Juliette Kopecky, Shannon Holmes, Navin Sharma and Mike Walsh for reading drafts.

  • http://KevinVogelsang.com Kevin Vogelsang

    You're on point, Mike. Boston doesn't have critical mass. The right entrepreneurial mix (those that don't already have their own startup) aren't working around each other. Schools are the best place for these co-founder collisions. However, doing startups isn't the culture.

    Basically what we need, and what I've been trumpeting as well, is a home for the entrepreneurial animals to go and work around each other and build these relationships, so they can get started. These are people that are a 10 on the entrepreneurial scale. They're going to do a startup no matter what, but they're stuck with the drag of not having the network or the supportive environment.

    However, what quickly happens, once the entrepreneurial animals (the 10s) have a place, people that are 7 to 9's on the entrepreneurial scale will see them, want to join in, and soon become 10s and so goes the chain reaction and the spread of the entrepreneurial disease/meme.

    This is how you grow the startup culture from the ground up. You don't need to wait 10 years for enough homeruns to be hit (although that sure helps). But then you have to hope that they feel the community helped them and that they give back….

  • http://alwaysontechnologies.com/ Lida Tang

    Boston is an odd beast, there is so much raw material around here but we don't have any heavy hitters that start and STAY around here.

    I remember talking with Navin about his startup ideas a while ago and now he is going the MBA route. It is hard to sustain energy for doing a startup by yourself.

    I've only been able to due to a good support system I have around Boston, but I probably could have gotten a team built if I was in San Jose.

  • Peter Hiers

    I disagree. Good designs are often created when there's one person working with a singular vision. Look at Steve Jobs controlling everything at Apple as just one extreme example of that. When you let too many cooks into the kitchen, everybody throws their own special blend into the pot and can contribute towards making a good product into an overly complicated one.

    But physical location matters very little on the internet and innovation can occur anywhere. For instance, some stripper in Las Vegas of all people came up with the idea for http://www.dirtyphonebook.com and that's pretty hilarious to me. Just goes to show you that innovation isn't constrained by geography, but by how much you're willing to work.

    I think Boston is a decent place for any kind of tech work to be honest.

  • http://mikepk.com mikepk

    It's interesting you bring up Steve Jobs. I would argue that Apple would never have happened if there wasn't both Steve Jobs *and* Steve Wozniak. Apple was not the product of a single individual. It also shows my point that the two Steves were friends before starting a company together, a twist of fate. Would Steve Jobs have been a computer visionary if he hadn't been exposed to Woz and his designs for what were to become the Apple computer?

    Once you have a trusted startup core, I agree location can become irrelevant. However, initial co-founders are often compared to a marriage. I don't think co-founders can build the trust and working relationship necessary virtually over long-distances.

  • http://mikepk.com mikepk

    Don't cont Navin out yet, I know he's doing his MBA but he's also still trying to get his project moving. :)

    I agree with you, the raw material is here, the passion and talent are here, what's missing is trust. I think if we can find ways to build the trust relationships, we'll see more startups. That's the theory, but reflecting on my own personal experience, I think there's something to it.

  • http://mikepk.com mikepk

    We've talked about this before and we're definitely on the same page. I think space, proximity and community are vitally important, but I think we can also try to tweak the process some to get more projects moving.

  • http://blog.startupsquare.com Tristan Kromer

    I've been dealing with this issue quite a bit lately. There is a lot of broadcasting (“I'm looking for a partner”) and quite a lot of searching (“querry: tech cofounder php”) but not enough discovery (e.g. “show me the person I didn't know I was looking for”).

    My partners and I are building a discovery and recommendation engine for co-founders based on the ideas they're interested in and their goals. We'd be delighted to have more feedback on it to try and get something to work broadly across verticals.

    If you're interested, please email me at Tristan at startupSQUARE.com or check out http://startupSQUARE.com

    Cheers,
    Tristan

  • http://alwaysontechnologies.com/ Lida Tang

    Boston is an odd beast, there is so much raw material around here but we don't have any heavy hitters that start and STAY around here.

    I remember talking with Navin about his startup ideas a while ago and now he is going the MBA route. It is hard to sustain energy for doing a startup by yourself.

    I've only been able to due to a good support system I have around Boston, but I probably could have gotten a team built if I was in San Jose.

  • Peter Hiers

    I disagree. Good designs are often created when there's one person working with a singular vision. Look at Steve Jobs controlling everything at Apple as just one extreme example of that. When you let too many cooks into the kitchen, everybody throws their own special blend into the pot and can contribute towards making a good product into an overly complicated one.

    But physical location matters very little on the internet and innovation can occur anywhere. For instance, some stripper in Las Vegas of all people came up with the idea for http://www.dirtyphonebook.com and that's pretty hilarious to me. Just goes to show you that innovation isn't constrained by geography, but by how much you're willing to work.

    I think Boston is a decent place for any kind of tech work to be honest.

  • http://mikepk.com mikepk

    It's interesting you bring up Steve Jobs. I would argue that Apple would never have happened if there wasn't both Steve Jobs *and* Steve Wozniak. Apple was not the product of a single individual. It also shows my point that the two Steves were friends before starting a company together, a twist of fate. Would Steve Jobs have been a computer visionary if he hadn't been exposed to Woz and his designs for what were to become the Apple computer?

    Once you have a trusted startup core, I agree location can become irrelevant. However, initial co-founders are often compared to a marriage. I don't think co-founders can build the trust and working relationship necessary virtually over long-distances.

  • http://mikepk.com mikepk

    Don't cont Navin out yet, I know he's doing his MBA but he's also still trying to get his project moving. :)

    I agree with you, the raw material is here, the passion and talent are here, what's missing is trust. I think if we can find ways to build the trust relationships, we'll see more startups. That's the theory, but reflecting on my own personal experience, I think there's something to it.

  • http://mikepk.com mikepk

    We've talked about this before and we're definitely on the same page. I think space, proximity and community are vitally important, but I think we can also try to tweak the process some to get more projects moving.

  • http://blog.startupsquare.com Tristan Kromer

    I've been dealing with this issue quite a bit lately. There is a lot of broadcasting (“I'm looking for a partner”) and quite a lot of searching (“querry: tech cofounder php”) but not enough discovery (e.g. “show me the person I didn't know I was looking for”).

    My partners and I are building a discovery and recommendation engine for co-founders based on the ideas they're interested in and their goals. We'd be delighted to have more feedback on it to try and get something to work broadly across verticals.

    If you're interested, please email me at Tristan at startupSQUARE.com or check out http://startupSQUARE.com

    Cheers,
    Tristan

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